India Pioneers Underground Coal Gasification in Landmark Mine Agreements

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In a landmark milestone for India’s energy transition and self‑reliance, the Ministry of Coal has executed Coal Mine/Block Production and Development Agreements (CMDPAs) with successful bidders for four coal mines under the 14th round of commercial coal auctions. For the first time, these agreements carry embedded provisions for Underground Coal Gasification (UCG), signaling a transformative leap in how India envisions and unlocks the full value of its coal reserves.

Historic First in Commercial Coal Mining

• Reliance Industries Limited secured the Recherla and Chintalpudi Sector A1 mines in Andhra Pradesh.
• Axis Energy Ventures India Pvt. Ltd. won the Dip Extension of Belpahar and Tangardihi East mines in Odisha.
• Two mines are fully explored, while two remain partially explored, reflecting India’s push to diversify its coal resource base.

UCG – A Revolutionary Technology

Underground Coal Gasification (UCG) has been tested and deployed in several countries, with notable projects in Uzbekistan, South Africa, Australia, China, India, Russia, and Poland. These nations have either run pilot plants or integrated UCG into their energy strategies due to their large, deep coal reserves.  

• Underground Coal Gasification converts coal into synthetic gas directly within the seam, eliminating the need for conventional mining.
• Enables utilisation of deep, thin, or otherwise unworkable coal seams.
• Expands India’s exploitable energy resource base.
• Supports cleaner and more efficient energy production alongside traditional extraction.

Strategic Value Addition to Coal Economy

• Syngas from UCG can serve as domestic feedstock for fertiliser production, reducing dependence on imported urea and ammonia.
• Strengthens food security by supporting domestic agriculture inputs.
• In chemicals and petrochemicals, syngas can replace imported natural gas and naphtha.
• Enables domestic production of methanol, dimethyl ether (DME), and synthetic fuels.

Scale of India’s Commercial Coal Auctions

• With these four CMDPAs, India has now signed agreements for 138 mines.
• Collectively, they represent a peak rated capacity of 331.544 MTPA.
• Projected annual revenues: ₹42,980 crores.
• Expected capital investments: ₹48,231 crores.
• Employment generation: 4,34,175 direct and indirect jobs.

Energy Security and Global Positioning

India has future‑proofed its coal sector by embedding UCG provisions into CMDPAs, ensuring long‑term energy security while embracing frontier technologies. This positions India at the forefront of the global energy landscape, balancing domestic production with innovation in clean coal utilisation.

Underground Coal Gasification (UCG) Explained

Definition
Underground Coal Gasification (UCG) is an in‑situ process that converts coal directly into synthetic gas (syngas) within the seam itself, eliminating the need for conventional mining.

What is Underground Coal Gasification?

• Coal seams are accessed by drilling wells.
• Oxygen and steam are injected to ignite and gasify the coal underground.
• Syngas (carbon monoxide, hydrogen, methane, carbon dioxide, water vapor) is extracted through production wells.
• Syngas can be used for power generation, chemical feedstocks, fertiliser production, and synthetic fuels.

Advantages of UCG

• Accesses deep, thin, or unworkable coal seams.
• Reduces surface disturbance compared to open‑cast mining.
• Eliminates coal transport and surface gasification steps.
• Supports cleaner and more efficient energy production.

Applications of UCG

• Power generation – syngas fuels turbines or combined cycle plants.
• Fertiliser feedstock – hydrogen and ammonia precursors reduce import dependence.
• Chemical industry – enables domestic methanol, DME, and synthetic fuel production.
• Hydrogen production – alternative source for industrial hydrogen and fuel cells.

Historical Context

• Concept proposed in 1868 by Sir William Siemens.
• Developed further by Russian chemist Dmitri Mendeleyev.
• Early experiments conducted in the Soviet Union (1928–1939).
• Modern pilot projects tested in Uzbekistan, South Africa, and Australia.

Challenges & Risks

• Technical complexity – requires advanced drilling, ignition, and monitoring systems.
• Environmental risks – groundwater contamination, subsidence, uncontrolled gas migration.
• Regulatory hurdles – strict oversight needed for safety and environmental concerns.

In India’s 1st, Ministry Starts Underground Coal Gasification Project Converting It to H2, CO and CO2 for Industrial Uses

Ministry of Coal initiates India’s First Ever Pilot project for Underground Coal Gasification in Jharkhand

Initiative aims to Revolutionize the Coal Industry by using in-situ coal gasification to convert it into valuable gases such as methane, hydrogen, carbon monoxide and carbon dioxide for industrial applications

Under the strategic direction of the Ministry of Coal, Eastern Coalfields Limited (ECL) has embarked on an innovative pilot project for Underground Coal Gasification (UCG) at the Kasta coal block in Jamtara District, Jharkhand.

This groundbreaking initiative aims to revolutionize the coal industry by using in-situ coal gasification to convert it into valuable gases such as methane, hydrogen, carbon monoxide, and carbon dioxide. These gases can be utilized for industrial applications, including producing synthetic natural gas, chemical feedstocks for fuels, fertilizers, explosives, and more.

This project represents a significant milestone for Coal India Limited (CIL) and its subsidiaries, positioning India as a leader in adopting advanced coal gasification technology. As the pilot project progresses, it aims to establish new standards and enhance energy security while promoting sustainable development.

In December, 2015, the Ministry of Coal approved a comprehensive policy framework for UCG in coal and lignite-bearing areas. In alignment with this policy, Coal India selected the Kasta coal block to implement UCG technology tailored to Indian geo-mining conditions. Managed by ECL in collaboration with CMPDI Ranchi and Ergo Exergy Technologies Inc. (EETI) from Canada, this project spans two years and comprises of two phases.

Underground Coal Gasification (UCG) is a fascinating process that unlocks the energy potential of coal reserves located deep underground. A suitable coal seam is identified, typically at depths where traditional mining is challenging and wells are drilled into the coal seam from the surface. Oxygen or air is injected into the coal seam through one well, while another well collects the produced gases. The injected oxygen reacts with the coal, initiating gasification. Oxygen or air is injected into the coal seam through one well, while another well collects the produced gases. The injected oxygen reacts with the coal, initiating gasification. The high temperatures (around 1,000°C) cause the coal to undergo chemical reactions, releasing gases.

The primary gases produced during UCG include — Synthetic Gas or 'Syngas', a mixture of hydrogen (H₂) and carbon monoxide (CO); Methane (CH₄); Carbon Dioxide (CO₂); and other Hydrocarbons, depending on coal composition.

The collected gases are extracted through the second well. These gases can be used for various purposes as mentioned below:

• Syngas can fuel gas turbines or combined-cycle power plants.
• Syngas serves as a feedstock for chemicals.
• Hydrogen Production:Valuable for clean energy applications.
• Heat Generation: Methane can be used for heating.

Moreover, UCG reduces environmental impact compared to traditional coal mining:

• No Surface Mining: Minimizes land disturbance.
• Reduced Emissions: Syngas can be cleaner than burning coal directly.
• Carbon Capture: CO₂ can potentially be captured and stored.

Besides this, other companies invloved in UCG projects in the country include ONGC and Neyveli Lignite Corporation Limited (NLC). These organizations have jointly identified several sites for studying the suitability of Underground Coal Gasification (UCG). Location of sites are Tadkeshwar in Gujarat, Hodu-Sindhari & East Kurla in Rajasthan, and Surkha in Bhavnagar district, Gujarat.

Coal India Limited (CIL) is driving India's coal gasification mission. They have identified five surface coal gasification projects which include Shilpanjal Pariyojana (West Bengal), Project Utkarsh (Maharashtra), Dankuni (West Bengal), Ashoka (Jharkhand), Mahamaya SCG (Chhattisgarh). Two tenders have been issued in the build-own-operate model.

Apart from India, it's worth noting that China, with significant coal reserves, has been actively pushing for coal gasification. They adopt proven western-developed gasifiers to gain operational experience.

These initiatives demonstrate the growing interest in cleaner energy solutions and the efficient utilization of coal resources.